Thank you, Shalendra. Good evening, everyone, and welcome to Q4 and FY '26 earnings conference call of Navin Fluorine International Limited.

Today on the call, we have with us Mr. Vishad Mafatlal, Chairman; Mr.

Nitin Kulkarni, Managing Director; and Mr. Anish Ganatra, Chief Financial Officer.

Before we proceed with the call, I would like to mention that this call will contain forward-looking statements about the company which are completely based on beliefs, opinions, and expectations as of today. Actual results may differ materially.

These statements are not the guarantee of our future performance and involve risks and uncertainties that are difficult to predict. A detailed safe harbor statement is given on page 2 of the investor presentation of the company, which is uploaded on stock exchanges and on the company's website.

With this, I hand over the call to Mr. Vishad Mafatlal for his opening remarks.

Thank you, and over to you, sir.

Good evening everyone, and a warm welcome to Navin Fluorine International Limited's quarter 4 and full year FY '26 earnings call. I am joined today by our MD, Mr.

Nitin Kulkarni; our CFO, Mr. Anish Ganatra; along with Ms.

Payal Dave, our investor relations advisor from MUFG in time. FY '26 has been a resilient year for Navin Fluorine, marked by strong deliveries despite a challenging global environment and geopolitical uncertainties.

By staying focused on our long-term priorities and leveraging capabilities, we remain committed to navigating these uncertainties with discipline and agility. I am pleased to report that the company has delivered 6 consecutive quarters of revenue and profitability growth, reflecting the strength of our business ethos, consistent execution, and sustained demand across key segments.

This momentum underscores management's focus on disciplined growth, market expansion, and long-term value creation for our stakeholders. I am glad to inform you that the board in today's meeting has declared a final dividend of Rs 8.6 per equity share, 430% of the face value of Rs 2 per share.

The growth in this fiscal is supported by contribution across the business verticals, led by structural demand drivers and constructive pricing environment. This diversification across products, customers, and geographies remains central to Navin Fluorine's long-term strategy.

Our strong balance sheet continues to provide flexibility, while our robust order book across verticals underscores the confidence our customers place in us. With proven capabilities and operational efficiencies, we believe that innovation-led companies like us are best positioned to capture long-term growth.

As we look ahead to the new financial year, we see commissioning and ramping up of additional HFC capacities of 32, MPP, and the upcoming Chemours project. These projects will transition from investment phase to revenue generation in this year.

We will continue to focus on a balance of product and service play, with emphasis on niche chemistries to drive differentiated growth and value creation. We will continue to deepen and broaden our customer relationships across geographies.

We will maintain a strong balance sheet with continued focus on capital allocation to deliver long-term shareholder value. I would like to thank our customers for trusting us, our employees whose dedication has made every achievement possible, our board for their continuous guidance, and our shareholders for believing in us.

With this, I will now hand over the call to Nitin to take you through the operational and segment-wise performance in more detail. Thank you.

Thank you, Vishad bhai, and good evening, everyone. Let me walk you through the segmental performance and key operational developments.

I am pleased to share that we have reported a growth of more than 2x in EBITDA and PAT for the year. Across all 3 business verticals, our performance is a continuation of operating momentum and execution discipline.

Starting with our HPP business, quarter 4 FY '26 revenue grew 20% year-on-year at Rs 393 crores, driven by improved realization and volume growth. Our AHF plant was successfully commissioned, and commercial supplies have commenced during the last quarter.

Our additional HFC capacity expansion, equivalent to 15,000 metric tons per annum of R-32, remains on track for commissioning in quarter 3 FY '27. The HPP business continues to benefit from a constructive global demand-supply environment, increasing adoption of low GWP refrigerants, and export opportunities.

Moving to specialty chemicals vertical, Q4 FY '26 revenue grew 39% year-on-year at Rs 360 crores, reflecting strong execution in both existing and new molecules. We continue to see scale-up in ongoing products, supported by customer confidence and long-term contracts.

Our Dahej MPP debottlenecking capex is progressing well and is targeted for commissioning in quarter 3 FY '27. The Chemours project is on track and expected to be completed by end June, early July.

Importantly, specialty chemicals growth is backed by order visibility and a robust pipeline for FY '27. Turning to CDMO business, quarter 4 FY '26 revenue grew by 61% year-on-year to Rs 186 crores.

This growth was driven by balanced mix of early, late stage, and commercial molecules across therapeutic areas such as oncology, respiratory, cardiovascular, neurology, and animal health. To sum up, FY '26 has reinforced our belief in the strength of Navin Fluorine's integrated platforms.

Our near-term priorities are efficient execution of announced capex and improving return ratios while scaling growth. Before concluding, I would like to take a minute to address the current geopolitical environment.

We are closely monitoring and navigating the developments with agility, particularly given implications on energy prices, logistics, and supply chain disruptions. With that, I would like to hand over the call to Anish for his remarks.

Thank you, Nitin. Good evening, all, and I welcome you all to the earnings call.

Moving on to the financial performance of the company in Q4 and FY '26, let me begin with the financial highlights for the quarter ended March 31st. Consolidated revenue stood at Rs 938 crores, registering a 34% year-on-year growth.

Operating EBITDA increased 80% year-on-year to Rs 321 crores, with margins expanding to 34.2%. Operating PBT grew 118% year-on-year to Rs 251 crores.

Profit after tax stood at Rs 213 crores, reflecting a growth of 124%. For the full year FY '26, net operating revenues grew to Rs 3,314 crores, reflecting a growth of 41%, supported by broad-based momentum across specialty chemicals, CDMO, and HPP.

Operating EBITDA more than doubled to Rs 1,082 crores, with margins at 32.6%, an expansion of 992 basis points, reflecting a favorable mix and operating leverage. Operating PBT grew 142% year-on-year to Rs 815 crores, as against Rs 336 crores in FY '24 '25.

Profit after tax stood at Rs 664 crores, as against Rs 289 crores. Our net working capital days have improved to 74 days versus 90 days, reflecting a stronger operational efficiency and better conversion cycles.

Going forward, the net working capital is expected to be in the range of 75 to 80 days versus our previous indicative guidance of 90 days 90 90 days of sales. As of 31st March, 2026, our net debt to equity stood at 0.01x, negligible, while both ROE and ROCE improved at 20% and 21%, respectively.

Thank you, and we can now open the floor for question-and-answers.

Thank you. Good evening, Nitin bhai and Anish.

I got few questions. Let me start with the Middle East situation right now.

I got two questions there. First, on the availability of raw material including, but not limited to, sulfur and methanol, have we faced any challenge on the key raw material availability, the forward contracts have not been delivered or suppliers have not been promised?

How is the situation there, because I think it remains fairly volatile and uncertain? A related question is on the inflation of the raw material.

We have been maintaining a 45 days inventory. We sailed through probably a better March and April, but we should be hitting a level where inventory is now completely depleted.

That means it necessitates the increase pricing to the contracts which we are working, and spot price is probably adjust much faster, but how do we think about passing on inflation of the contracts like HFO, agrochemical, and CDMO? That's number one.

Number two, on the refrigerant gas, there is a notification which government has put up, and now, I think, the plant can come up till 2027. There could be a situation where the competition, who was not earlier looking at, has significantly add the capacity.

In '27, probably we are eyeing a capacity now in excess of 1,20,000 metric ton in India. That situation is very different than what we were earlier hoping for CY '26.

Now, how does it changes the scenario for pricing, because in our presentation, we are talking of a revenue potential from new R-32 of a tune of Rs 600 to 825 crores? At a lower end, we are looking at a price which is Rs 400 crore, probably half of the price what currently it is trading at.

Why do you think you're looking at 400 as a bottom pricing? Third Number three is probably on the margin.

We appreciate that you have been calling out margin, some benefit coming up from currency, but can you help us with the numbers, what is the margin benefit which has come in purely from the currency? These are my initial questions.

Thank you.

Sorry, Sanjesh, can you repeat your last question on margin?

We have been calling out benefit because of the currency depreciation which has adding to the margin of 34%. Now, what is that margin benefit purely coming from the forex?

Okay. You've got a couple of questions.

Thanks again. Starting from your comment on the Middle East situation and the availability of raw material, see, again, as we all know, the situation continues to remain volatile.

As we mentioned before, our focus is on ensuring that we remain sort of vigilant to this, focus the efforts of the management with a lot of discipline, and at the same time maintain agility in how we respond. To be honest, this in some ways feels like the COVID days, yeah, where you had a call every day morning with the leadership, and you would sort of look at what's happening in the market and how we sort of mitigate any events.

Far, we have not seen any disruption. We have seen inflation go through, but fortunately, we've also been able to pass on a lot of these back to the customers.

There could be some lag effect, but other than that, we're pretty confident of passing on the price increases off to the finished product, yeah. We don't see a material risk save for what may happen tomorrow, I don't know, yeah, but as we talk now, we don't see a material risk coming from that.

On your question on inflation and inventory depletion, we are maintaining healthy level of stocks. Far, we've not had a situation where we've not been able to get materials.

Yes, the pricing has gone up, and that is kind of universally known, but we've not had a situation where we've had to shut anything down for want of raw materials or anything like that.

Customer demand

Customer demand has remained robust during this period,

yeah.

No demand disruption because of inflation is what we are telling or it's just a restocking demand as dissipating an inflation? In fact, post the situation, there may be further restocking demand that will come up, because there will be some pent-up thing that will open up once situation improves.

Currently, we're not seeing any destruction of demand as in our numbers as we speak now as well, right? Now, your point on refrigerant gas notification, '27 as the asset for bringing any new capacities, that notification still doesn't change the position on the quotas, yeah.

You should remember that that quota is only going to be available as aligned with the Kigali protocol, which is '24, '25, '26 average production and 65% of your GWP equivalent of HFCs of 2009 and '10, right? That doesn't change, and while we can bring in capacity, I think the key question is, is the quota available or not to anybody bringing in those capacities.

Margin, in terms of Sorry.

Yeah. Sorry, did you have No, just one one one, Anesh bhai, one related question on ref gas.

Is it clear from the government side that the R-22 quota which company had, only that company will be eligible, or government can redistribute the R-22 quota on a pro-rata basis? Do we have that clarity?

I think, Sanjesh, again, our understanding of the Kigali rules, our understanding of how this is meant to play out clearly indicates that you must have a right to win in this, your right to win comes from the quota that you have. That's exactly what we've always been saying, and which is why we put our capacity to consume our quota fully.

Very clear.

Yeah. Margin, on the number specification, I know you said there is a currency tailwind, and there is a currency tailwind, if you analyze the currency tailwind with the inflation figures that you will find that a lot of this is a wash between currency and inflation.

What we are now seeing in terms of the growth of the EBITDA, I think it's about 990 basis points from FY to FY, you will see 70% of that for Navin is coming from our capacities coming on the ground, our volumes going up, and 30% is coming from affirmative actions on pricing that we've taken. This basically implies that Navin's sort of operating leverage is meeting its capacity.

That's essentially what's happening out here, man.

Very clear. Two related two related questions.

Yeah.

Anish bhai, two questions. One, on agrochemical application, the demand clearly is pretty weak from the innovator.

Are we seeing that play out for us in FY '27? Second, can you help us with CDMO late-stage contract, how many are we working?

One, we know it's commercial with the European client, but we have supplied two clients, if I remember, one in the Europe and one in the US, on the commercial. Can you throw some light on late-stage contracts we have in our pipeline and how should we see them becoming commercial for us?

Yeah. On agrochemical, again, if you look at the global scenario, there is a slow sort of reset happening, you're seeing some indication of volume recovery.

Pricing is always going to be lagging that, that I think all of us understand. Navin sort of, as we've said before, our strategy was to work on newer molecules, etc.

from a longer-term point of view. If you look at FY '26, we have done in all, I believe, close to about 13 new molecules during the year, and that, along with the demand sort of resurfacing, gives us enough confidence to say that, as we look into FY '27, we have visibility almost up to about 80% of our capacity utilization.

I think we're well covered for FY '27, and as we move into 2027, we'll get further clarity on how this is reshaping into '28 and beyond. In terms of CDMO, late stage, early stage, we have a healthy balance of mix.

If I was to tell you in terms of number of molecules, I think we are working close to about 50, 55 molecules, half of them being in late-stage commercial and half of them being in early stages. There's a very healthy, balanced portfolio there.

As we look into coming into our FY '27 number that we've always said is $100 million, this number that we've delivered this year of Rs 541 crores is again a solid sort of journey to kind of get to where we want to get to by FY '27, and like I said before, we have been inching closer to it. With this quarter, we've further inched closer to that number.

There's very good confidence that we will push for hitting the number, and we'll see where we get to at the end of the year. There is a lot of work happening on these commercial molecules as well, and we've indicated broadly the therapeutic areas that we talked about on the slide, if you see, is oncology, if I remember, neurology, cardiovascular, animal health.

In all of these areas, we are playing in sort of a good balance, frankly. Very confident on the CDMO growth stage.

Very clear, Anesh bhai and Nitin bhai. Thanks.

Yeah. I'm done.

Thanks for all the answers.

we will

Yeah. Thank you,

Thank you, sir.

Chemours, we've already said the project is on track for commissioning end of June, early July, and as I've stated previously, this is the initial capacities to accelerate adoption in the market. As we move to that over the next sort of 18 months, we get a better understanding of what that market size looks like, and accordingly, there will be a capex that will be rolled on the back of that understanding.

Premature to talk what it will be today, but I think it's fair to assume that we are the only manufacturing site for Chemours, given the nature of the product, that it is essential to support the AI growth that we are seeing around us, and the unique benefits of the product, it should be a reasonable one, no?

Second, on the pricing side,

Can you speak a bit louder if you don't mind, Naushad?

Yes, sir. Second, on the pricing side, especially on the Fermion and other portfolio as well, apart from ref, which all portfolios you're seeing price uptick, and what is your near-term outlook there, and when is the price revision expected in the Fermion portfolio?

I don't know what's driving that question, Naushad, but Fermion opportunity is quite publicly known because it is published both by Orion as well as Bayer, and would encourage you to have a look at it, actually. The last I remember, it's about $5 billion peak sales in '28 or '29, and like we've said, we are very firm believers of the projections that Fermion and has shared with us, and there is solid growth momentum to come on that as we look into the future.

Pricing and all, I don't know where the question is coming from. If you have a particular point on pricing, I would request you to elaborate on it.

See, it's been two years to this contract, and we have scaled it up. I was just thinking, should we keep working on the initial pricing which you would have contracted, or would there be any point where the price revision would trigger because your scale and volume is going up in this particular project?

I will leave you to your judgment, yeah. These are commercial things, we deal with it, but it's not something we can talk on any sort of forum outside the company.

Thank you so much.

All the best. All the best.

Thanks.

Thanks for the opportunity, and congrats on strong set of numbers. First question, unfortunately, on the pricing part, given that there is a raw material price inflation, and some of our contracts for HFO as well as for CDMO would be calendar year contracts, will there be a price rejig or pass-on immediately, or will it be a transitory phase that for a couple of months will be charging the previous price and then maybe a couple of months later, the newer price incorporating the higher raw material cost?

Thank you.

Thanks, Rohit. Rohit, see, the pricing and RM price inflation, etc., these different contracts cover it in different ways from a commercial standpoint.

Obviously, we have both a product play and a service play. In service play, typically, you have pass-through mechanism, this will fall into that pass-through mechanisms.

Now, how and what we are doing to accelerate that recovery is something that is being worked upon, discussed, but it's not a surprise to both us and our customers about the price rise, there is a good reception to that. The second question on What was your second thing?

You said transitory months or something around I think I answered that, right?

Right. Correct.

Okay.

The second question is slightly on R-32 in terms of broader structure in the domestic market. What is our understanding in terms of the current consumption of R-32, and given that the newer capacities, even if we don't consider the ones who don't have quota, and we are adding, there is another player who has got quota and they will be adding, how this incremental volume which is coming into play will be placed, and, again, unfortunately, asking the same question again in terms of pricing, will there be any impact given that this additional capacities will come on stream?

R-32, again, I think we've gone through this several times, but you have to look at the overall GWP cuts that are happening in the world and the blend play that our R-32 is uniquely positioned to be in. That drives the pricing conversation.

If I remember correctly, China prices currently are close to about $9, yeah. There is a significant sort of reason why they are stronger than and getting stronger as we speak, okay?

One has to read into those dynamics. I think it was Sanjesh who had asked, and maybe I didn't address it at that point in time, but there was a question on the broad range that we've given, 600 to 875.

Frankly, as part of our investment approach that we take to the board, we always present a downside case, too. We've only translated that in full transparency to how we've reported to the market.

It's a downside case that we always do more as a math rather than our belief, and our belief is really driven by the demand-supply dynamics, which, again, I've said this before also, that the first R-32 capacity came in when prices were sub-$2, and if the economics stood then, they will still stand now, yeah. Yeah.

Just one clarification on the numbers front, our employee benefit expenses have been up only 4% on a YoY basis, and there has been a significant scale-up in terms of operations. Will it be normalized during FY '27, maybe inflation-adjusted plus the newer capacities coming on stream, which earlier probably were capitalized in the capex cost?

Thank you.

I think when we started the year or some point in last year, and I think it was again a lot of the analysts asking us the question where our employee cost was I think 12%, 13% of sales, and we took some affirmative actions to bring it down. What you see in the numbers is they look almost flattish, but those reflect typical increments, those reflect typical sort of new joiners coming in, and those also reflect the affirmative actions taken by management to optimize, right?

That's a combination of all. I think we are done with the optimization where we are, going forward, you will see the increase largely.

You will see the normal increase coming, yeah, the normal increase. I think, if you had to put your model in, I would model it in the range of between 7.5%, 8.5%, 9%, not more than that.

We are

very firm on maintaining it in that threshold.

Perfect. Thanks a lot, and all the best.

No worries.

Hi, sir. Thank you for the presentation and congratulations on a strong finish.

Just wanted to get a sense with respect to the customer conversations that you're having. Do you get a sense that we could move to increased restocking on a more sustainable basis, with customers potentially building up more buffers versus the just-in-time sentiment that we've gotten used to for the last couple of years?

Just with respect to agrochemicals, given the dislocations that we've seen in fertilizers, and obviously, we don't know how the situation will resolve itself, do you see any risk of that flowing into potential off-takes for some of the agchem products? Thank you.

Vivek, see, our portfolio on agchem is mainly export-driven, right? As in the export-driven, you start getting solid visibility before the end of the calendar year.

That visibility translates into orders, which then translates into deliveries. We're not seeing any disruption on that front.

To be honest, everybody will be managing their supply chain disruption, how they do it, frankly, is not something that they would share with us in our customer interactions. We've definitely not seen any demand destruction as yet in terms of if that's your question or that's where you were going with it.

Sure, sir. No, it's actually going the other way where you could see more restocking potentially with what's happened, not specifically on demand destruction.

No. As I said, see, the ag market, and we've always maintained this, that fundamentally that market has structurally good demand in the long term.

In the near term, it's going through a reset, and it's going through a reset in a slow manner. You are seeing some volume increases, and prices are kind of still sort of subdued.

My understanding and my expectation is that as we go through the year, you will see price rises lesser than volume increase. It's going to look like flattish in terms of price rises, but that's where we are, to be honest.

Beyond that, I don't think I have much to add.

Sure, sir. That's helpful.

Thank you and all the very best.

Thanks, Vivek.

Hi, sir. Thanks for the opportunity and congratulations on a consistent and good set of numbers there.

First question on the CDMO bit, just sort of trying to understand the growth outlook better. One, have we expanded our capabilities on the CDMO side versus let's say maybe 12 12 months back, or is it largely the same?

Related part here, how has the revenue mix changed between the late-stage molecules and the early-stage molecules for us?

Capability expanded, certainly the case. If you mean capability through acquisition of new technology, etc., no, not yet.

We have definitely expanded our capability because every therapeutic area that we stated out there is an area where we are actively working on molecules, some in commercial stage, some in early stages. To be honest, when you're looking for a revenue mix between early and late stage, you should look at more at the number of molecules, because commercial molecules will tend to have a larger footprint in terms of the value.

Like I said, therefore, we have got about 50-50% and close to about 55, 60 molecules that we are actively working as we speak on.

Sure. Okay.

Because this molecule number has been largely consistent if I look at last 2-3 years, around that 50, 55 odd numbers. Which is where I was hinting from a revenue mix perspective.

No. The molecules on commercial side, you're right, because it takes long time to sort of go through the cycles, as you're aware of.

The early stages is campaign-driven largely, and they keep moving. Our sort of endeavor is to kind of hold it at a good balance, and that's why you probably see the numbers like that.

Sure, Anish. No issues.

Just second, more of a bookkeeping, few clarifications there. One

No issues. Thanks.

Ankur, finish off here. Let him finish off, now.

Maybe next time we can hold the decision.

Yeah. Thanks, sir, for taking my question.

Sir, just wanted to know, you have grown really phenomenally well in the specialty chemical segment as well as the HPP segment as well for this year, growth in excess of 35% and 45%. Now, just wanted to know, from this higher base when you look into the next year FY '27, I know you gave a lot of color on the agchem side as well, just wanted to know, can we kind of clock in high double-digit revenue growth for both these segments going ahead in FY '27?

Jason, I think I've given apart from just not giving you the specific number, but let me sort of reiterate the growth blocks going into FY '27. We've said the HF plant has already been commissioned.

It was commissioned in February, you should see the revenues for that ticking into FY '28. You should see the revenues for Nectar that we've talked about, the dedicated fluorochemical plant, and we've always said that our endeavor would be to be around 50%, 60% capacity utilization this year.

That would go to about 70%, 75% in the coming year. You would see the new sort of capexes coming on stream, the debottlenecking, and we've again given you the bar for that and the timeline for that.

We've given you R-32 and the timeline for that, and again, you can model your numbers from what you have as in available data from the market. You start putting all this together, and obviously, we've talked about the Chemours project as well.

cGMP4 was commissioned last quarter again and you would see that or December, if I'm not mistaken, and you will see the revenues sort of kicking in this year too again from that point of view. Fermion growth is very solid, again, you can factor in those numbers, too.

You will have enough to see the trajectory of the growth, and I would be surprised if it's not double digit, but I'm happy to clarify if it is not separately.

Sure. Thanks for that, sir.

Just one question. Wanted to understand with the Middle East crisis going on, any impact you saw in terms of ref gas volumes from that region for that reason?

Middle East, frankly, our export footprint is very little, mainly the R-22 gases, and those haven't gone in March, and they are still in the schedule, but not yet gone in yet. To be honest, we are working on numbers for Q1 excluding the Middle East movement at all.

If any of that comes in, will be an upside. The demand across the globe is very robust and also no logistics issues on that front.

Sure. Thanks a lot for answering my questions, sir.

Thank you.

Good evening to the team. I have two questions.

My first question to Mr. Parthasarathy is a forward-looking one.

How are you positioning Navin Fluorine to capture the evolving demand in specialty fluorochemicals and the CDMO space while mitigating risks from global regulatory changes and raw material volatility? What strategic levers will differentiate the company from its peers in the coming quarters?

That's my first question. I'll ask my second question after this.

Thank you.

Sorry, who did you direct your question to?

Mr. Roy.

We don't have any Roy, you'll have to wait forever. No, let me answer that anyway.

It's Anish here. On the agchem front, see, again, we have a service play, right?

In this service play, we work with global innovators. Frankly, their regulatory risks of the intermediates we supply to them are managed by them.

We are working on some new innovator molecules which are part of the strategic pipeline of these global innovators. I would suspect there is not any sort of issue over there, ma'am.

Sorry, did I lose you? I was just kidding

he's

Okay.

Good evening, Anish bhai and Nitin ji. A couple of questions.

First is you spoke about demand. You are not seeing any kind of a disruption.

I'm sure you would agree that there are two parts to this. One is one set of customers who would be restocking, and second set of customers maybe they might be a little bit going slow and maybe doing a bit of wait-and-watch.

Your read on the demand situation, is it more because that some of these customers are restocking, and probably the issues with respect to the demand on the higher prices, will it come with a lag? Is that a right way to look at our business at this point of time?

The way I would look at it, if I look at '28 and the order visibility we've talked about coming to 80% utilization, that's Sorry, Arun. Yeah.

What I was saying was, if you look at the visibility we've talked about on FY '28 in the agro specialty, frankly, the capacity utilization at 80% is probably as best as one would go in an MPP environment. Then doing 13 new molecules last year and sort of working that through in the coming year, we don't see what you are saying, some de-stocking, some not de-stocking.

All, frankly, the way it manifests for us is in the order visibility and in the order books, and that continues to be solid.

Of course, I'm sure, well, for your pharma category would be relatively insulated.

I'm talking of agro. Pharma, again, frankly, you guys will know far more than I do because Fermion numbers are out there, and so you will see the growth they are seeing annually year-on-year, as well as the peak projections, as well as the further label extensions that they're working on.

So

Anish bhai, outside pharma and agro, which categories you would say that at a risk because higher prices eventually lead to a demand destruction at a later stage, not long term, but at least one or two quarters there will be a demand destruction. Can you call out some categories where some of your peers probably who have been witnessing it?

I think, again, this is a economics question of theory. There are several articles one can read that, but at $150 sustained dollar oil prices, I think there is a concern that the global demand may slow.

Today, we're not seeing that, we can't factor that. What we are doing today is making sure that we are resilient, we are working hard at what we can do, we maintain our discipline, and frankly, in this environment, we maintain significant agility as well to respond to situations as they arise, right?

That's what we can do, and that actually will prepare us in the best possible way to whatever is thrown at us. That's our focus.

No, I understand, Anish bhai. What I'm asking is what categories we should be looking out for outside the pharma and agro?

Because as an outsider, we do not have much insight what's happening on a

Arun, it's very simple. At $150, if there is demand destruction, you will see interest rates, inflation, everything go haywire.

That will be a global scenario of slowdown. I'm sure you're reading reports from the World Economic Forum, etc., etc.

That's not something I am planning on, that's not something in my gift to control. As management, we're doing what is within our gift of influence, what is within our gift of control.

Understood. On the forex benefits you spoke earlier, there are two costs associated for you.

One is the dollar dollar-denominated costs, and another is a rupee-based cost. Is it fair to assume when the when the contracts goes for the renewal, customers would not be would be would be negotiating only to the extent your rupee cost will not be, repriced to the same extent?

Commercial negotiations are never linear. You can't have one attribute and you relate that to another attribute.

These are holistic contracts where you would look at everything, how a contract is structured, how you would sort of attend the risks of inflation. If you want to do a rupee-based contract, well, then you will have to take inflation in your stride, right?

There are several cuts and nuances to it, and it's not a subject I think we can cover here, boss. This,

sir, one final bookkeeping question. HPP segment, sequentially there is a revenue decline.

One would expect that with the AHF plant scaling up and a better ref gas pricing, at least

Arun, can you repeat, where did you see the decline? I just heard the word decline.

HPP segment QoQ decline, sir. Sequentially, not YoY.

Oh, yeah. Okay.

That you're talking of Q3 to Q4, right? These are things in terms of every of these plants have plant shutdowns, right?

We had taken a plant shutdown in our Q4, and we also took an opportunistic exercise to recharge the catalyst in one of our plants. This is ahead of the heat season to maximize the value in quarter 1 of this year.

That's just normal routine activity.

Plus

Middle East, obviously, as and I have said this before, that we had no shipments in the Middle East, which was close to about 15 odd 15 to 16 odd crores.

Any quantification possible for the shutdown

Hello.

Sorry. Am I audible?

Keyur.

Okay. Sir, two questions on the HPP side.

First, the Honeywell contract, we have always talked about say long annual some quantum. Have we any scope for growth or expansion from current levels, both in Honeywell and in our current R-32 plant?

Just wanted to understand before the new R-32 plant, what growth levers do we have in the HPP? That is first question.

Okay. Before on the growth levers in HPP, I'm sure you should certainly count the growth coming in from AHF plant, which is already been commissioned.

In terms of your question on Honeywell contract, you know that HFO has applications primarily in the construction area, but also ancillary applications in the refrigerant cooling space, too. Whatever we are doing on demand today, it is at an 80% capacity, as I have told you before.

There is room to expand within that same capacity by another 20%. That's nothing new that I'm saying today, but it's been something we've always been telling you guys.

What was the other question? You had something on 32.

Basically, the question was growth levers ahead of new plant. You mentioned Honeywell additional 20% and AHF, right?

No, Keyur, I didn't say ahead of 32 plant. I said there is opportunity to grow that at some point whenever that demand comes through.

Today, we are at 80% size. Before that, you should certainly count in the AHF capacity and the growth coming from

that,

and 32 will come in on time, as we've said that before.

Sir. Second question on the segment two, specialty chemicals.

There, for this project Nectar, I think there is some change in the product from the client. Now, under the new scope, what is the visibility we have for merchant sales, which, outside the contracted volumes?

The contracted volumes are fully covered. The additional molecule actually gives better risk management to that plant.

We have also made shipments outside of the contracted revenues for qualifications. Those qualifications are under progress.

Besides, there are also possible downstream applications of that product that we're working on. We're not duly concerned about utilization.

Yes, we would have liked to have a full utilization by end of FY '28, which would be the 2 years, but I think we are realistically talking about 75% to 80% is where we will get to by end of FY '28.

Okay. Just lastly, overall profit

Sure. Noted, sir.

Thank you.

Good evening. Thank you so much for taking my questions.

Sir, first question on the margins. The gross margins this quarter are stable on a sequential basis, 58% odd, even though the CDMO business has ramped up substantially on a sequential basis.

Just sort of trying to understand what the dynamics are there and if we should have expected normally the margins to have expanded a little bit more.

No, margin expansion in a diversified business is linked not just between business mixes, but also the portfolio that you play within the each vertical. Specialty has different molecules, this has different molecules, there's both an intra-business play and an inter-business play, yeah?

You should factor in both. It's sort of a combination of both that results in that number.

It wouldn't be fair to just take one equation and jump to that conclusion. It could depend on what products we've done this quarter versus what we did last quarter.

Like I said before, there were 13 molecules we did in FY '26 in the specialty business. Three of them were done in quarter

4. Thank you.

The other one was just with regard to the margin guidance for FY '27 in the context of this inflationary environment. Is 30% still a good benchmark to work with?

That was one. Just the other quick thing from my side, the HPP verticals seem to have shifted markedly towards India in the past two quarters in terms of sales.

What might be driving that? Thank you so much.

To answer your first question on the margin guidance, we've always maintained that we will endeavor to do 30%, given what we know today of the business circumstances, plus minus 1% to 2%, yeah, which we've always said, yeah? That we will hold for the whole year.

This is not a quarter number, and we've always maintained that you should look at the margin from a full-year perspective, yeah? Your question on HPP sales shifted to India, actually HPP has had a bigger shift, and that's one needs to understand that it was a business that we were doing in the range of about 250, 300.

Now that per quarter, now that has moved to clearly in the 400 mark. In the coming years with the new R-32 capacities, AHF capacities, that will further go up in terms of contribution.

As you increase your profile in this fashion, your customer base is going to change. You should look at the increase in India.

Obviously, we've done R-32 contracts in India. Obviously, we've done global reach.

If you look at the export data, you will see that we've reached new geographies, new customers. A lot of it will change as you grow the business in the pace at which we are growing, yeah.

Thank you. Thank you so much.

Thanks.

Hi, sir. Thank you for the opportunity.

Sir, two questions from me. First one, I wanted to get a bit more understanding on the Nectar project.

I believe that 50% was towards one of our marquee customers, and the balance 50 was something that we are still trying to figure out in terms of how to dispose those volumes. I believe that the first 50% should definitely be in line with our expectations, but given whatever we're seeing in the global agri industry, would you have any understanding on how we should be placing the balance 50% of that plant?

That would be number one. Second one would be we have recorded about 211 crores of contract liabilities on the balance sheet, including current and non-current ones, which have increased from about 139 crores, if I can calculate correctly.

What could be the attribution to that? These would be my two questions.

Thank you.

Sure. On Nectar, you know that apart from the marquee customer, there are 2 to 3 other customers, right?

We are going through qualification campaigns. We are not figuring out.

We are actually working on a plan, and that plan is to get the qualification done and then the sales. We think it is slower than what you would have liked it to be, therefore, we are talking of the 75% par this year and then the balance next year.

We've also talked about the fact that, and I've just said that before to the previous respondent, that we would be looking at sort of downstream applications of the product. If your question is more around the pricing of that product, etc., with the Chinese market, etc., we are confident that even at that price, we would make reasonable margins that would not be deteriorative to our overall margin profile.

Yeah? Contract liabilities, now as contract liabilities actually reflects the moneys that we've received from our customers towards the capital contribution both on Chemours project and the marquee project for the additional molecules, therefore, you see the increase that you see, primarily.

Sure, sir. That's great.

Thanks a lot and all the best.

Thank you for taking my question. Sir, I would like to understand more on the Fermion contract, since now the cGMP4 is commissioned from this quarter onwards, from Q4 onwards, will the manufacturing that was already done in your Dewas facility now move to the other block of cGMP4, or do you have visibility for more volumes to off-take in the next year, both will be utilized?

The Fermion block was a dedicated block, obviously, what we are currently doing elsewhere will go into dedicated block because that's why we built in the dedicated block. That answers your first question.

The second question, do we have visibility to more volumes? Yes, of course, we do have visibility to more volumes, and that will trigger off a decision in terms of where do we place them, etc., as and when those volumes come into play.

Okay. There could be a possibility of a cGMP5 as well if you have more visibility for the contract?

There will be a phase 2, and obviously, we are working with other molecules, too. We've got space for 5, 6, and 7, I believe.

Okay.

We're scalable. If we need to do it and there is a business case, we will do this.

Can you mention the quantum of CDMO contribution that has come in from Fermion for the full year of FY '26?

Can I mention the

Quantum of Fermion contribution. Can?

Sorry, Keyur?

Fermion contribution.

Dhara, we don't commercially talk about these values. We've kind of quiet on those.

Like I've said, you all have the benchmarks. It is whatever, 2%, 3% of the sale value, etc., in terms of the intermediate.

That all right? Eventually, it will be 50-50 between the partners, that also you know.

You have enough what you need to know in that way.

Sure, sir. Thank you.

All right. Thanks a lot, everybody, for taking the time to interact with us today.

A very useful session from our perspective, certainly, and hope you had the same outcomes as well. Thank you again, and have a good evening, all.